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Mr Frost said foreign workers are often better qualified and more enthusiastic.

Hard-working and dedicated: Migrant workers at a vegetable market in Lancashire. Nine out of ten new jobs last year went to foreign workers

'Overwhelmingly, business has adopted
migrant workers for the simple reason that they are often better
educated and have a stronger work ethic than local people,' he said.

SLOWDOWN IN BUILDING INDUSTRY FUELS FEARS FOR THE ECONOMY

Fears about the health of the economy were fanned today after two key surveys revealed a worrying slowdown in the construction industry.

New orders fell by 16.3 per cent in the second quarter of this year to their lowest level since 1980, the Office for National Statistics revealed.

And the sector grew in August at its slowest pace this year as the housing sector continued to contract and confidence hit its lowest level for seven months, according to a Markit/CIPS survey.

The surveys suggest the sector, which has seen strong growth in recent months, could be running out of momentum and will add to fears that the UK's economy is in danger of slipping back into recession.

The gloomy surveys suggest the sector, which grew by 0.5 per cent in the second quarter of the year, is being dragged downwards as confidence is eroded amid the

Government spending cuts and the general global economic slowdown.

The manufacturing sector is also suffering a slowdown, according to recent figures, while the powerhouse services sector is still in growth but is being squeezed as disposable income is hit by inflation.

Howard Archer, economist at IHS Global Insight, said the latest ONS construction data were 'horrible' and it 'bodes ill for output prospects in the near term at least'.

He said: 'The construction sector faces an extremely challenging environment, which threatens to weigh down appreciably on activity over the coming months.'

'It is not about paying lower wages. If the Government is serious about British jobs for British workers, then not only do they have to improve the education system, but also radically change the welfare system so it never pays not to work.'

In a bid to kick-start the economy, business chief Mr Frost also said there needed to be a bonfire of red tape and an
end to 'endless tinkering' with regulations.

'There have been six major changes to parental rights in the last 10 years,' he said.

'Small businesses in particular are worried about getting it wrong and ending up in front of an employment tribunal, so the default is often only to employ an extra person as a last resort.

'This is hardly the right outcome when we have 2.5million people unemployed in the UK.'

Figures released yesterday raise questions about whether the Government’s drive to get millions off benefits and into work can be achieved without further curbs on immigration.

They will also increase pressure to reform the bloated benefits system.

The figures, produced by the Office for National Statistics, reveal that employment among working age people rose by 181,000 in the Coalition’s first year.

Yet employment levels among British nationals rose by just 14,000, or less than 8 per cent of the total.

Employment among non-UK nationals rose by 163,000 during the period – equal to more than 90 per cent of the total.

TUC general secretary Brendan Barber said that it is not true that it pays to be unemployed.

'Benefit levels are already very low in the UK. If we want to ensure people are better off in work, we need to improve the quality of work and not reduce pay, vital employment rights or benefits,' he said.

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Migrant workers are better educated and harder working than their British counterparts, says commerce chief